Deciding on a maintenance provider for your company’s post-warranty data center requirements involves a host of factors, including cost containment considerations, service level requirements, engineering capacity and capability, and the extent to which the provider complements the organization’s current maintenance strategy.
The ideal solution is one that supports an organization’s vendor rationalization and cost containment strategy while giving the organization greater control over the lifecycle of its technology investments.
More and more, independent service organizations (ISOs) are working with clients to deliver a single-source solution for the IT equipment maintenance, making cost reduction and management of the maintenance of the equipment a much simpler endeavor.
“Given the current economic climate, organizations are looking to gain greater control and maximize their return on all technology investments,” says Ted Rieple, executive vice president of business development with Park Place International. “Engaging an ISO is a tremendous mechanism to maximize a return on investments in technology infrastructure by reducing the cost of maintaining it.”
Smart Business learned more from Rieple about how to leverage a business relationship with an ISO and an OEM (original equipment manufacturer) and what working with an ISO can do for a company’s bottom line.
Do IT decision-makers have a perception of the differences between ISOs and OEMs?
IT professionals operate in a dynamic and fast-paced environment. The immense pressure to reign in costs while constantly innovating invariably makes it difficult for them to find the time to evaluate maintenance options. First and foremost, organizations need to recognize that there are options for hardware maintenance beyond extended warranty through the OEM. Second, OEMs often will leverage ISOs to deliver service. So while the perception may be that the OEM is delivering the service directly, the truth of the matter is that in many cases that OEM service is being delivered by an ISO.
When clients are trying to understand the difference between ISO support and that of an OEM, it is important to share the variety of options available to them with an ISO and the extent to which OEMs use ISOs for service delivery. It quickly becomes clear that an ISO is really a wonderfully cost effective mechanism to simplify maintenance of the mission-critical hardware.
How does engaging an ISO help a company to reduce costs?
Original equipment manufacturers tend to be focused on selling equipment and supporting only the products they manufacture, whereas ISOs allow clients to consolidate vendors by maintaining multiple OEM platforms. ISOs also have the distinct advantage of leveraging the research and development investments made by manufacturers in product development without having to make those direct investments. As a result, an ISO’s cost structure tends to be far lower than that of an OEM, allowing them to pass a 40-55 percent savings on to the client.
There is also the benefit of simplified management of not only the maintenance of that equipment, but also the administration with a single point of contact with simplified billing options.
Are there opportunities for an OEM and an ISO to work together to assist organizations with their data center needs?
Many of the best-run organizations have strong OEM and ISO relationships. The ISO role should be complementary to a client-OEM relationship. An ISO can maintain equipment that is end of service life — equipment that can no longer be serviced by that OEM — which of course adds value for clients by helping them extend the useful life of mission-critical equipment. Second, an ISO can support competing equipment. So if a business has a strong EMC relationship, for example, an ISO can support its Sun Microsystems environment, its Hewlett-Packard environment or its IBM environment. So an ISO can be really complementary to an OEM relationship.
What are some complementary services that a company can expect from working with an ISO?
The complementary services include things like simplified warranty and out-of-warranty contract management. It’s analogous to having a homeowner’s insurance policy, auto insurance policy and life insurance policy with one insurance agent — it just makes things easier.
Also, because of the ‘lean’ nature of many IT departments, an ISO can assist with the relocation of data center equipment. This is a useful service for clients to provide resources, time and ultimately the functionality and accountability that they need. An ISO can act as an extension of an IT department when resources may not be available. Also, many organizations need secure disaster recovery plans following strict mandates and regulations based on industry. This is a great complementary service for an ISO to offer.
Finally, ISOs are also a good resource for replacement parts. By virtue of being in the maintenance business, a significant requirement of that is you need to maintain significant replacement parts inventories. This is another complementary service that an ISO can provide beyond just maintenance.
Ted Rieple is the executive vice president of business development with Park Place International. Reach him at (440) 991-3104 or Ted_Rieple@parkplaceintl.com.